Court would let public stations sell candidate and issues ads

Published in Current, April 23, 2012

No, there won’t be any windfall of Obama and Romney Super PAC gazillions for public stations this year.

By a 2–1 vote, a three-judge panel of the U.S. Court of Appeals in San Francisco did indeed rule April 12 that public broadcasters can carry political and public-issue commercials, but the decision is unlikely to take effect any time soon, even in the Ninth Circuit states of the West.

Neither side in Minority Television Project v. FCC got everything it wanted in the decision, so one or the other could ask the appeals court for a review by a larger panel of its judges even before the District Court implements the appeals court’s order.

For Minority Television Project, licensee of San Francisco pubTV station KMTP, the court decision left standing the main legislation that bars untrammeled advertising on public stations. The low-profile non-PBS station, which fills much of its four DTV multicast channels with German, Chinese, South Korean and other imported or foreign-language programs, went to court after the FCC fined it $10,000 for violating that law 1,900 times between 1999 and 2002.

The unexpected ruling was not exactly welcomed by most other pubcasters, however. If it’s upheld, and stations surrender to temptation, it would not only destabilize the already-blurry definition of noncommercial stations — possibly threatening their nonprofit status — but also leave them airing campaign ads, an unloved kind of commercials these days.

“Imagine if you turned on your TV set someday soon and were greeted by Sesame Street, brought to you by the letter C, for ‘creeping campaign cash corruption,’” wrote Bill Moyers and Michael Winship on the Huffington Post last week. The media-reform group Free Press started a petition to PBS and NPR, urging public stations: “Please don’t pollute public broadcasting stations with political attack ads.”

At least two stations — KPBS-TV/FM in San Diego and KSFR-FM in Santa Fe, N.M. — promptly proclaimed that they would not sell candidate and issue ads if they become legal. The San Diego station’s g.m., Tom Karlo, told a local TV reporter: “It’s not our intention to make money off elections via political advertising — rather, KPBS will remain committed to educating the voters.”

Even Chicago’s WTTW, whose leaders have long argued for the freedom to carry commercials, isn’t keen on running campaign spots. “When it comes to politics and attack ads, I think we would pass if we had the option,” says Dan Schmidt, president.

How things go in billboard law

Walter Diercks, the media attorney who handled KMTP’s appeal, finds it odd that pubcasters are embracing FCC restrictions that, in his view, impede their press freedom.

Diercks, a partner in the D.C. firm Rubin, Winston, Diercks, Harris & Cooke, repped billboard companies more often than broadcasters over the past three decades. He went at the anti-commercialism law with an argument that has worked again and again to defeat local laws restricting billboards. When a city or county okays billboards for local businesses but blocks national advertisers, Diercks says, it’s messing in “content-based regulation” that risks defeat in court.

Examining the 1981 amendments loosely defining the underwriting credits that pubcasters can broadcast and the advertisements that they can’t, Diercks saw that Congress also had engaged in content-based picking and choosing:

Underwriting credits pass muster if they meet a series of fuzzy criteria.

Ads for nonprofits weren’t “advertisements” at all, and could be aired by noncommercial stations, though Diercks says some stations don’t do it.

Ads for products and services offered for profit were forbidden.

So were the separate categories of messages that “support or oppose any candidate for political office” and that express views on “any matter of public importance or interest.”

Lawyers defending the FCC insisted that the whole law is constitutional.

Representing KMTP before the court, Diercks disagreed pointedly. Because Congress favored some kinds of content over others, all parts of the anti-commercialism provision violate the First Amendment, he argued. The appeals court judges agreed with him. They noted that a public station could sell an ad for a nonprofit’s services but could not air one about a public issue from the nonprofit — or from anyone else.

In the opinion by Judge Carlos Bea, with John Noonan concurring, the two judges did some picking and choosing of their own. They endorsed the long-held analysis, confirmed by congressional testimony in 1981, that allowing noncommercial broadcasters to air ads for for-profit goods and services would increase incentives to pursue higher ratings and undercut niche-audience and educational programming. But they found Congress had “no evidence in the record” showing that issue-oriented and candidate ads would have the same effect. Barring those ads would be unconstitutional, they ruled.

The dissenting judge, Richard Paez, agreed with his benchmates that Congress had substantial evidence to protect pubcasters’ programming, limiting their advertising options no more than necessary to achieve the goals of public broadcasting. And the protection should extend to issue-oriented and candidate ads.

Political ads run directly counter to Congress’s interest in barring political interest groups (and their advertising dollars) from affecting programming decisions,” he wrote.

Freedom worth having?

“For almost 60 years, noncommercial public broadcasters have been effectively insulated from the lure of paid advertising,” Paez commented. “The court’s judgment will disrupt this policy and could jeopardize the future of public broadcasting. I am not persuaded that the First Amendment mandates such an outcome.”

The final verdict on the various breeds of advertising could be years in coming. Lawrence Miller of the Washington firm of Schwartz, Woods & Miller says many lawyers and broadcasters have long questioned whether the ban on public-issue ads was constitutional. “It’s so vague and so unusual, we’ve always assumed that it’s vulnerable.”

Miller was surprised, however, that the Ninth Circuit panel would knock down the prohibition on candidate ads. He expects that question could end up in the Supreme Court.

Public stations already had some unhappy experience with candidate ads, Miller notes, during a period, long gone, when Congress required them to give federal candidates “reasonable access” to the airwaves but would not allow them to charge for time as commercial broadcasters do.

If candidate ads are permitted, public stations will want to know the terms. Are they required to air the candidate ads and charge a low rate, as commercial stations are?

If carrying candidate ads were mandated, they could swamp a public station’s relatively limited inventory of available timeslots, says WTTW’s Dan Schmidt.

And the ads themselves would damage public TV’s reputation, he fears.

“For decades, we have worked really hard to provide a counter to all the attack ads saturating the airwaves,” says Schmidt. WTTW not only covers politics in its nightly Chicago Tonight but remains one of the public stations that routinely offers two or three minutes of free, unedited airtime to congressional candidates.

Not that Schmidt is getting soft on FCC restrictions. He and his predecessor at WTTW, the late Bill McCarter, long contended that the important legal distinction of public stations is their nonprofit status, not the sometimes-obscure distinctions between “noncommercial” underwriting credits and all-out ads on commercial stations.

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The station, previously known as KQEC, was donated to the big public station KQED-FM/TV in 1970, but the new operator left it off the air from 1972 to 1977. The FCC revoked KQED’s license to the station in 1988 and awarded it to a nonprofit headed by former FCC employee Booker T. Wade Jr., who still heads the station.

Craig Aaron, president of the media reform group Free Press, predicts the regulatory pullback could lead to the on-air pollution of public stations. “At a time when people are turning to public broadcasting to get away from the flood of nasty attack ads, viewers don’t want to see Sesame Street being brought to them by shadowy Super PACs.”

I live in Madison, Wisconsin, and I know one state radio network that’s drooling for ad money, and also looking to hand out free ad time to their friends with non-profits.

Do remember that the term “non-profit” doesn’t mean “no-profit”. It just means you can’t distribute profits via stock dividends. Profit gets distributed in the form of salaries, bonuses, perks, benefits, etc.

This state network’s listener organization is headed by a woman from another private arts fund-raising organization who can now order around state staff to do work useful to her in her other job, and she has access to public radio’s valuable donor lists, leads and donor information.

Somehow I think that this woman’s private non-profit arts organization will be getting free ad time as soon as the state radio network execs feel it’s safe to brazenly move forward. A state exec mentioned this decision specifically and then drooled a puddle on the floor.